Supreme Court Holds PTAB Time-Bar Decision Is Not Appealable
On April 20, 2020, the Supreme Court of the United States issued an opinion holding that an inter partes review (“IPR”) institution decision by the United States Patent and Trademark Office’s Patent Trial & Appeal Board (“PTAB”) on the impact of a dismissal-without-prejudice of a district court complaint on 35 U.S.C. § 315(b)’s one-year time-bar limitation to file an IPR is not appealable. Thryv, Inc. v. Click-to-Call Techs., LP, No. 18-916, 590 U.S. ____ (2020). According to the Court, 35 U.S.C. § 314(d)’s prohibition on appeal of IPR institution decisions and the Court’s decision in Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 579 U.S. ___ (2016) were determinative.
The America Invents Act, which created inter partes review, provides that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” 35 U.S.C. § 315(b).
In this case, it was undisputed that a petitioner’s predecessor had been served with a patent-infringement complaint in 2001. However, that case was dismissed without prejudice and the underlying district court action was filed in 2012. Within one year of service of the 2012 complaint, the petitioner filed its IPR challenging the validity of the asserted patent claims. The patent owner argued that the petition was time barred based on the 2001 complaint, and therefore should be dismissed. The PTAB disagreed, holding that, because the complaint was dismissed without prejudice, the provision of 35 U.S.C. § 315(b) was not triggered, and the petition was not time barred.
After a long procedural road and the Federal Circuit’s decision in Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d 1329 (Fed. Cir. 2016), opening the door to appeals of the PTAB’s time-bar determinations, the Federal Circuit agreed to hear en banc the patent owner’s time-bar appeal. The Federal Circuit focused on the plain language of the statute, finding that it is unambiguous and does not provide any exceptions or exemptions for complaints in civil actions that are dismissed, with or without prejudice.
The Supreme Court disagreed, focusing its decision on Section 314(d) and Cuozzo. 35 U.S.C. § 314(d) provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” In Cuozzo, the Court held that this provision “preclude[es] review of the Patent Office’s institution decisions” at least “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to institute inter partes review.” Cuozzo, 136 S.Ct. at 2141.
Justice Gorsuch dissented, joined in part by Justice Sotomayor. Justice Gorsuch criticized what he termed “linguistic nonsense” in reading Section 314(d)’s prohibition on judicial review of “the determination” “under this section,” to actually prohibit two determinations under two different sections. Both he and Justice Sotomayor also highlighted the strong presumption in favor of judicial review, and criticized the majority’s broad reading of Cuozzo as addressing matters outside of Section 314 (i.e., Cuozzo held that a matter under Section 314 itself was not appealable).
This decision finally resolves an issue that has divided the Federal Circuit. In Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), the Federal Circuit held that it lacked jurisdiction to review the PTAB’s decision to institute IPRs asserted by Achates against Apple in district court. Then, in Wi-Fi One, a divided en banc court overruled Achates and held that, given the strong presumption in favor of judicial review, that time-bar determinations under Section 315(b) are appealable.
The potential implications of this decision are expected to be widespread.
Presumably, the PTAB will now continue to follow its own prior precedent that an infringement complaint dismissed without prejudice restarts the 1-year clock as if that complaint had never been filed (the PTAB had cited the Wright & Miller treatise for the proposition that “a voluntary dismissal without prejudice under Rule 41(a) leaves the situation as if the action never had been filed.”).
Similarly, the PTAB again has near complete discretion to questions concerning privity and the real party-in-interest, and will likely continue to limit discovery regarding such issues.
And other areas impacted could include same-party and new-issue joinder, for example, the Federal Circuit’s recent decision in Facebook, Inc. v. Windy City Innovations, Inc., 953 F.3d 1313 (Fed. Cir. 2020), where the Federal Circuit vacated the PTAB’s final written decisions with respect to the claims that were improperly added through joinder.